CAIT demands restoration of MSME status for 8 Cr traders

The Confederation of All India Traders (CAIT) has demanded the restoration of MSME status taken away in 2017 from 8 Cr retail and wholesale traders who are part of the service industry. The government in June 2017 removed retail and wholesale traders from the MSME category, forcing the players to either borrow at a higher rate or from informal financial sources, CAIT Secretary General Praveen Khandelwal told PTI.

According to banking sources, about Rs 3 lakh Cr loans given to them are at the risk of losing the tag of 'MSME loan' at the end of March, when banks do their annual closure. According to estimates, the country's largest lender SBI alone will have to reclassify Rs 50,000 Cr loans given to traders, and ICICI Bank will do reclassification of about Rs 25,000 Cr at the end of this month.

As a result, many banks will face the problem of meeting priority sector lending (PSL) target and the shortfall may have to be parked with Small Industries Development Bank of India (SIDBI) or Micro Units Development and Refinance Agency Ltd (MUDRA). Even traders are facing difficulty in getting loans from formal sources and even denied registration on Goverenment e-Market (GeM) platform as there is no MSME tag attached to the business.

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